The new Agriculture Land Leasing Act

The Bharatiya Janata Party-led National Democratic Alliance government has come out with a model Agricultural Land Leasing Act, 2016. The Centre says it will improve agricultural efficiency and bring about equity, occupational diversification, and rapid rural transformation.

An Expert Committee of the NITI Aayog, headed by T Haque prepared the Act. The Committee says the Act has tried to balance the rights of actual land owners and actual cultivators/tenant farmers. Legalisation of land leasing would ensure the security of land ownership rights for landowners, which in turn would provide security of tenure to tenants. It (legalisation) will also help improve tenant farmers’ access to credit, crop insurance, and input use. This will result in the utilisation of fallow land.

The Task Force on Agricultural Development set up by the NITI Aayog had identified the absence of formal recognition of tenancy in many states as a major hurdle in consolidating landholding. Prior to the passing of the Act, tenant farmers and sharecroppers were not able to get benefits from various development programmes and also were not eligible to get any relief and compensation in the event of crop damage due to natural disasters since they were not formally recognised.

Currently, land ownership in India is recognised through the Registration Act of 1908. But on strictly technical terms, this Act only records the selling and buying of lands and doesn’t indicate ownership. As of now, most state governments have either legally banned or imposed various restrictions on agricultural land leasing.

Main features of the proposed model Agricultural Land Leasing Act, 2016

- This is to ensure complete security of land ownership right for landowners and security of tenure for tenants for the agreed lease period.

- It will remove the clause of adverse possession of land in the land laws of various states as it interferes with the free functioning of the land lease market.

- Allow automatic resumption of land after the agreed lease period without requiring any minimum area of land to be left with the tenant even after termination of tenancy.

- Allow the terms and conditions of the lease to be determined mutually by the landowner and the tenant, without any fear on the part of the landowner of losing land rights.

- Facilitate all tenants including sharecroppers to access insurance bank credit and bank credit against pledging of expected output.

- Incentivise tenants to make an investment in land improvement and also entitle them to get back the unused value of the investment at the time of termination of tenancy.

Why it is so special

The Act will allow leasing of land for the purpose of agriculture and allied activities for a specified period and as per mutual agreement between landowner and lessee cultivators. Agriculture and allied activities encompass the raising of crops including food and non-food crops, fodder or grass; fruits and vegetables, flowers, any other horticultural crops and plantation; animal husbandry and dairy; poultry farming, stock breeding; fishery; agro-forestry, agro-processing, and other related activities by farmers and farmer groups.

Further, the major benefit expected from the Act would be to lessee-cultivators as they would be entitled to obtain loans, crop insurance, disaster relief or any other related benefits or facilities provided to farmers by the state or Central government based on their agricultural use of the leased-in land.

What NITI Aayog wishes

The proposed Act limits the use of agricultural land to agriculture and allied activities only. However, Arvind Panagariya, Vice Chairman, NITI Aayog in his official blog said that he wished to extend this kind of Act to non-agricultural uses (industrial purposes) as well. He said that state governments wishing to facilitate industrialisation could further benefit from liberal land leasing if they simultaneously liberalised the use of agricultural land for non-agricultural purposes. He called upon state governments to amend laws to permit leasing of agriculture land for industrialisation.

What farmer activists think

However, farmer activists across India have strongly advocated not allowing the usage of agriculture land for industrial purposes.

“We welcome the development that tenant farmers and sharecroppers would be getting their rights by being recognised. However, agricultural land should not be given to corporate houses in their name. There should be a viable ceiling on land to be given on lease and it should be given only to landless, agriculture labourers or unemployed youths at the household level. The ceiling on land should be such that it can provide a good living for a household. Otherwise, there is a danger of this land being transferred to corporate houses, which can prove disastrous for the food security of this country,” said Sunilam, National Convener of Bhoomi Adhikar Andolan.

Yudhveer Singh, General Secretary, Bhartiya Kisan Union echoed Sunilam. “We welcome serious problems faced by tenant farmers and sharecroppers being addressed by this Act. However, agricultural land should not be given in the name of agro-processing to industrialists. Further, grazing lands for animals should not be allowed at any cost to be given on lease in the name of the fallow land. Grazing land is very crucial for a village and it should be reserved for livestock only,” he said.